the national median selling price for all homes sold in July was $213,500, down 0.2% from the $214,000 median price realized in June, but up 13.7% from the median price of $187,800 in July of 2012, and just 7.3% below the NAR peak median of $230,400 in 2006....this was the 8th consecutive month of double digit year over year median home price increases and the 17th consecutive month of increasing median prices overall, a run only matched by the January 2005 to May 2006 period...the average home price realized in July was $260,100, up a bit from $260,000 in June and 10.2% above the average home price of $236,100 in July of last year...prices west of the Rockies continued to rise; the median sales price in the West was $287,500, up 19.2% from a year earlier, while the average sales price was $329,700, 14.2% higher than last July...nationally, the median price for a single family home in July was $214,000, down 0.3% from $214,000 in June, but up 13.5% from a year earlier, while the average price for a single family home was at $260,600, down from $261,500 in June but 10.0% higher than the $237,000 average of last July...2.28 million previously owned homes remained on the market at the end of July, up from 2.19 million in June, which the NAR calculates to be a 5.1 month supply at the current sales pace; that's still 5% below year ago figures, and the NAR blames these tight inventories of available homes for above-normal price growth in some areas..

the pie graph to the above right, from the NAR, shows the percentage of those homes sold in July in each of several price ranges; only 15% of homes sold for less than $100,000, represented by the turquoise wedge in the upper right of the pie, while another 44%, represented by the large purple wedge, sold for between $100,000 and $250,000, and 29% more sold for between $250,000 and $500,000...thus, 12% of homes sold for over a half million, with 2% of the total selling for over a million each...below, we have an NAR bar graph that shows the year over year percentage change in the number of homes sold in each of those price brackets; since those homes selling for under $100,000 is the only range to see a decline, and all three price ranges over a half million saw increases of over 44%, it's clear most of what is driving the year over year price increases is a change in the mix of homes sold...

a factor contributing to the changing mix was that distressed home sales, which sell at a discount, only accounted for 15% of July sales, down from 24% of sales a year earlier...foreclosures accounted for 9% of sales and sold for 16% less than similar unencumbered homes. while short sales accounted for 6% of sales and sold at a 12% discount...another element in the mix is that new purchases by investors slumped to 16% of total sales in July, down from 17% in June and down from a peak of 22% of all sales earlier this year...first time home buyers arent participating as they normally would; they still just accounted for 29% of sales in July, down from 34% a year ago, while the NAR reports all-cash transactions continue to account for 31% of sales, same as June, and up from 24% a year ago...the percentage may even be higher than the realtors report; an analysis last week by economists at Goldman put the all cash figure at over 50%, with only 44 cents of every home purchase dollar currently being financed, compared to 67% before the crisis.

not too surprisingly, there's quite a bit of regional and metro variability in these metrics; housing economist Tom Lawler has a monthly table showing cash sales, short sales, & foreclosures for selected cities which he's been adding more cities to monthly; he shows 70.0% of Florida townhomes & condos that sold in July exchanging hands for cash, with a high of 75.5% cash sales in the Miami area, compared to 15.9% in Omaha and 16.1% in the mid-Atlantic region; Las Vegas shows the highest distressed sales percentage in July at 36.0%; a year earlier, more than half the home sales in Las Vegas, Reno, Sacramento and Orlando were either foreclosures or short sales...

the sudden July divergence between the two home sales metrics is obvious in the above graph from Bill McBride, which shows existing home sales monthly up in July tracked in blue, and new home sales, also annualized, tracked in red and clearly down, with the sales count for those on the right margin...both existing and new home sales had been generally, if erratically, increasing, until July, when closings of older homes spiked up in an apparent attempt to lock in lower rates, while new contract signings on new homes seemed to dry up in the face of higher rates...the McBride chart also shows what Bill calls the "distressing gap" between an allegedly normal relationship between new home sales numbers and sales of existing homes...looking at the graph, it seems a case could be made that there is now a new normal ratio between the two..

with this report, even the direction of the change in year over year new home sales has become uncertain....census reports that July new home sales were "6.8 percent (±18.6%)* above the July 2012 estimate of 369,000."; the asterisk in that headline directs us to an explanatory footnote which says in part "it is uncertain whether there was an increase or decrease" in new homes sold this year compared to last...what that statement means is the best they can guess with the scant data that they have is that there's a 90% likelihood that new home sales in July were somewhere between 11.8% less and 25.4% more than a year ago; in other words, if July's seasonally adjusted sales rate was extrapolated over a year, it's fairly likely we'd see somewhere between 325,458 and 462,726 new homes sold….with this degree of uncertainty, the results of these reports are not something we'd want to hang our policy decisions on...

Census estimates that there were 172,000 new homes for sale at the end of July, which they've seasonally adjusted to 171,000 to arrive at a 5.2 month inventory of homes to be sold at the current seasonally adjusted sales rate...obviously, at least a ±14.5% margin of error would have to be applied to that metric as well...of those new homes remaining unsold, an estimated 36,000 were completed, 102,000 were under construction, and 34,000 had not yet seen groundbreaking...the median sales price of new houses sold during July was $257,200, which was down from $258,500 in June, which was revised up from the $249,700 median figure which was reported last month...the average new homes sales price in July was $322,700, up from the $302,200 average sales price in June; also revised up from the average sales price of $295,000 reported last month...a factor in the higher average in July vis a vis the lower median was that 5% of new homes sold in July reportedly sold for over $750,000, while only 3% of sales were in that upper price bracket in June...that the average new home price went up in July while the median price went down can even be seen on our adjacent FRED graph, which shows the average new home prices monthly since January 2004 in red, and the monthly median new home selling price in green over the same period, with the price ranges marked on the right margin...also shown on the same graph in blue is the track of new home sales monthly at a seasonally adjusted annual rate, with the scale for those on the left...

the states showing the largest gains in non farm payrolls in July were California, which added a net 38,100 additional jobs, Georgia, which saw 30,900 added to their payrolls, and Florida, which added 27,600 jobs; 15,000 of the California jobs were in professional and business services, which could be anything from a management consultant to taking out the trash, and 12,100 were in "trade, transport, and utilities" of which jobs in retail were the largest gainer nationally; Georgia's gains were widespread across all sectors, with 7,200 new jobs in government being an outlier compared to other states...meanwhile, Florida, which lost 6,900 government slots, saw 13,100 added in "trade, transport, and utilities"...other states that saw statistically significant one month job gains included Arizona with 13,700, Michigan with 21,400, Connecticut with 11,500, Delaware with 2,800, Kentucky with 9,500, North Dakota with 2,700, Utah with 10,600, Washington with 8,800, and West Virginia with 6,300...four states, meanwhile, saw statistically significant job losses; those with July job decreases included New Jersey, which shed 11,800 payroll jobs including 5,800 in government, Nevada, where 10,200 job losses were spread across several sectors, Maryland where 9,200 less jobs included 4,300 fewer in government, and New Hampshire, which lost 3,200 payroll positions..

since July of last year, 33 states saw statistically significant payroll job increases and only Alaska had a small decrease of 1,600 jobs...the map below, from page 20 of the full pdf release, shows the number of jobs added over the previous year as a percentage of total payroll jobs in each state; the unshaded states of Utah, which added 40,500 jobs, and Arizona, which saw payrolls increase by 74,700, saw the largest percentage job gains at over 3.1%, while Washington, Idaho, North Dakota, Colorado, Texas, Mississippi and Georgia all saw non farm payrolls rise by over 2%…meanwhile, those states with the darkest shading below have seen less than a 1.0% increase in payroll jobs…numerically, the largest year over year job increases occurred in Texas at 293,000, California at 236,400 and Florida at 143,700…

even though the national unemployment rate fell to 7.4% in July, 28 states and the District of Columbia saw their unemployment rates rise during the month, while only 8 states saw their rate fall; of those states seeing a statistically significant change in the unemployment rate, seven saw increases: Alaska's unemployment rate climbed from 6.0% to 6.3% and Georgia's increased from 8.5% to 8.8%, while California, Iowa, Nebraska, Vermont, and Virginia each saw their unemployment rates tick up 0.2%...meanwhile, Mississippi saw a significant decline in its unemployment rate from 9.0% in June to 8.5% in July...the map below, from a BLS table and map supplement, shows the seasonally adjusted unemployment rates by state as of July...all states are now below the 10% threshold; those in red have unemployment rates above 8.0%, led by Nevada at 9.5%, Illinois at 9.2%, Rhode Island and North Carolina, both at 8.9%, and Michigan and Georgia both with 8.8% unemployment rates, while California, New Jersey, Kentucky and Tennessee all have official rates over 8.5%...on the other end of the spectrum, North Dakota at 3.0% and South Dakota with a 3.9% unemployment rate are shown in yellow...over the year, California’s rate has fallen from 10.6% in July a year ago to 8.7%, Nevada is down from 11.3%, Rhode Island is down from 10.5%, and Florida’s unemployment rate fell from 8.7% last July to 7.1% with this report..

(the above is my weekly commentary that accompanied my sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

Wednesday, August 21, 2013

People around the world are noticing that our planet's weather is dramatically changing. They are also beginning to notice the long lingering trails left behind airplanes that have lead millions to accept the reality of chem-trail/Geo-engineering programs. Our innate intelligence tells us these are not mere vapor trails from jet engines, but no one yet has probed the questions: WHO is doing this and WHY.

the real story of this July retail sales report was not July's weaker than expected 0.2% month over month growth, but the revision of June's sales from a 0.4% increase over May to a 0.6% increase, which was treated as a footnote elsewhere; the fact is that the change to June's earlier estimated sales figures was greater than the entire increase in sales reported for July...as originally reported, the advance estimate of June retail sales was at $422,794 million; that has now been revised to a preliminary $423,649 million, an $855 million correction....July's sales gain of just $832 million to $424,481 million was calculated from that new, revised June baseline...so on net, this report is indicating a larger jump in retail sales than was indicated by last month's headline 0.4% increase with a less than 0.1% downward revision for May...

moreover, the revisions to June data brought significant revisions to sales in most retail trade sectors vis a vis what we reported last month; on the left below, we have the image of the table showing the sales percentage for the major retail sectors from this month's report; lined up approximately next to that on the right we have the original June percentage table from last months report (archived pdf here); just to clarify the headings, the first estimate of each census report is labeled "advance", the second estimates, a month later, are the "preliminary" report, and the third estimate is called the "revised" report...here below, we see the "advance" estimate of June retail sales on the right showing a 0.4% increase in the top line total retail sales from May (as published last month), and in the middle columns we have the "preliminary" correction to that change from May at 0.6% and to the change from a year earlier at 5.9%...but that's not all; note the change for each of the major retail business types; sales at car dealers, for instance, were originally reported up 2.1% for June; now they're indicated as up 3.3%; on the other hand, for instance, clothing stores had been showing a 0.7% gain over May, but now they show flat sales at 0.0%....

since the revision of the June report actually accounted for more of the increase in July retail sales over what was last reported than the July change, we'll take a brief look at some of the major changes that resulted in that swing...first, as we've already alluded to, June's seasonally adjusted sales at vehicle & parts dealers were originally reported to have risen 1.8% from a seasonally adjusted $79,028 million in May to $80,461 million in June; that's now been revised to an increase of 2.9% from $79,300 million to $81,584 million in June, so combined with the May revision, the increase in June auto sales was rewritten 1.4% higher than it was reported last month...but even with that big jump in revised auto sales, retail sales ex auto still managed to eke out a 0.1% increase, from May's $341,720 million to $342,065 million in June, versus the nearly flat sales increase without autos & parts reported last month, because of additional upward revisions for other retail sales...

two major retail businesses which had been thought to have been off substantially in June weren't as bad as originally reported...at building and garden supply stores, where sales were first reported to have fallen 2.2% to $25,772 million in June from $26,346 million in May, sales actually only fell 1.6%, to $25,909 million from a revised May sales total of $26,330 million; then sales at bars and restaurants, where June's sales were first reported at $45,251 million, 1.2% below May's level of $45,821 million, Junes sales have now been revised to a much smaller decline of 0.5%, from a seasonally adjusted $45,771 million in May to a preliminary sales figure of $45,559 million in June...meanwhile, non-store retailers, who had been thought to have seen sales rise 2.1% from $37,154 million in May to $37,936 million in June, were revised this month to show a 1.5% June sales gain from a much lower revised May figure of $36,739 million to a preliminary sales total of $37,276 million in June...

among retail trade sectors showing better than average adjusted sales increases in July, the broad category of stores specializing in sporting goods, hobbies, books or music saw sales rise 1.0% from $7,421 million in June to $7,498 million, while sales at clothing & accessories stores were up 0.9% from $20,860 million in June to 21,046 million July, and sales at food and beverage stores were up 0.8%, from $53,935 million in June to.$54,355 million in July...in addition, sales at gas stations rose 0.9% from $45,390 million in June to $45,784 million in July as gasoline prices were up 1.0%...year over year sales gains for all of these better than average July retailers, however, was below the 5.4% YoY gain posted for all sales; sales at sporting goods, hobbies, books & music stores was were up just 2.3% from last July, clothing stores saw sales rise 4.2% from a year ago, food and beverage stores posted a one year sales increase of 3.9%, and July sales at gas stations were 4.9% greater than last years..

other than automotive, retail sectors that saw seasonally adjusted sales decrease in July included furniture and home furnishing stores, where sales fell 1.4% to $8,398 million in July, after rising 2.5% to $8,516 million in June; since furniture sales wouldn't seem to be subject to much volatility, this also seems like it may be another seasonal adjustment aberration...July sales at building materials and garden supply stores were down another 0.4% to $25,802 million in July after being down 1.6% to $25,909 million in June, suggesting more of a slowdown in home building and remodeling than is evident from other data; nonetheless, sales for this retail group were still 7.9% above those of a year earlier...meanwhile, sales at electronic and appliance stores were off 0.1%, from $8,411 million in June to $8,402 million in July, and down 0.4% year over year...other than electronic and appliance retailing, only department stores, where sales fell 4.8%, saw worse year over year sales results...

our FRED pie chart below was constructed to give us visual picture of the relative size of each of the component retail business groups included in this report (click on any piece for a large pie); note that since FRED limits us to a maximum of 12 data sets per graph, we have omitted the “miscellaneous store retailers”, which accounted for $10,595 million of sales in July, or less than 2.5% of the total…these retailer groups are arranged around the pie from those with the most sales to those with the least, so in the upper right corner, we have motor vehicle & parts dealers in blue at 19.5% of the remaining sales, and then, counterclockwise from there, general merchandise stores in red at 13.3% of sales ex “other”; food and beverage stores in green, accounting for 13.1% of sales; gas stations in orange and restaurants and bars in grey, both accounting for 11.1% of sales; non-store retailers, or online & mail order sales, in medium blue at 9.0%; building material & garden supply retailers in light green at 6.1%; drug stores in mustard coloring at 5.7%; clothing and accessory stores at 5.1% in pink; electronic and appliance stores in purple and furniture and furnishings stores in yellow, both at 2.0% each; and lastly, stores specializing in sporting goods, hobbies, books or music in light blue accounting for 1.8% of July retail sales, all ex "other"..

the cost of shelter, the largest component of the CPI at 31.585% of the total index, was also up 0.2% in July, as the unadjusted shelter index also rose 0.2% from 286.024 to 286.617; rent of primary residence was up 0.1%, owner's equivalent rent was up 0.2%, and prices for lodging away from home was up 0.2%...prices for household commodities were broadly lower, with both window and floor coverings and furniture and bedding 0.6% cheaper, while prices for appliances fell 1.3%...the price of new vehicles was up 0.1% while the price of used cars and trucks fell 0.4%, and transportation services rose 0.4% as the cost of vehicle maintenance and repair rose 0.3%, car insurance rose 1.3% and airline fares fell 1.3%...the transportation services index, which is not seasonally adjusted, rose 0.2% from 286.024 in June to 286.617 in July...prices for medical services rose 0.1% as hospital costs rose 0.3% and prices for physicians services fell 0.2%, while prices for medical commodities rose 0.4% as the major component of prescription drugs rose 0.5% even though prices for medical equipment and supplies fell 0.8%; the combined medical care price index rose by a a little more than 0.1%, from 424.264 in June to 424.836 in July....prices within the broad category of education and communication services were up 0.1% overall, as elementary and high school costs were up 0.6% while prices for internet services and electronic information fell 0.7%...education and communication commodities, meanwhile, were down 0.6%, as computers and peripheral equipment fell 1.6% while prices for textbooks were up 0.5%...prices for apparel, which had been stable most of the past year, rose 0.6% as 2.1% higher prices for women's & girl's apparel more than offset a 1.2% decline in prices for men and boy’s wear and a 0.3% decrease in prices for footwear....recreation equipment prices fell 0.2% as TV prices fell 2.6% and photographic equipment was 3.0% cheaper in July than in June, while prices for recreation services were up just 0.1%, with only movie, theater, and concert tickets seeing an increase as large as 0.6%...the combined unadjusted recreation index, which is based on 1997=100, fell by a statistically insignificant percentage, from 115.407 to 115.384...

our FRED graph below captures the track of the major aggregate price indexes shown above going back to 1997, a date chosen because that's when two of those composite indexes originated; the rest represent recent prices based on prices from 1982 to 1084 = 100... the price index for food and beverages is in blue and and the price index for housing is in red, which together account of over half of the CPI and which both have tracked near the overall index since 1982...meanwhile, the apparel index in violet, which is just 3.564% of the CPI, has actually been falling since the 1990s until just recently...the orange line at the top of the chart is the medical care composite index; if you look closely you might notice the moderation in the steady increase in the price of health care everyone's been talking about...next, in light green, we have the volatile transportation index, which reflects the gyrating cost of gasoline and fuel related costs of transportation services, moderated by the slow steady rise in the cost of vehicles; lastly, we have our two indexes benchmarked to 1997: education and communication in dark green and recreation in bright blue, neither of which has risen much over that shorter timespan...

another key release of the past week was on Industrial production and Capacity Utilization for July from the Fed, which showed that the seasonally adjusted industrial production index, which is benchmarked to 2007 = 100, was unchanged from the June reading of 98.9...the manufacturing index, the major component of the overall index, was down for the first time in three months, 0.1% lower than June at 95.6, while the utilities index, reflecting less than normal use of air conditioning, was down 2.1%, and the output of "mines" saw a 2.1% increase to 120.3, reflecting record high gas and oil extraction in July...the overall index has not moved much over the last 6 months, as it read 98.8 at the end of February, again with both manufacturing and utility output lower over 6 months while the mining component rose...the manufacturing slowdown is only recently, however, as over the past year manufacturing has seen a 1.3% increase, boosting the industrial composite index to a 1.4% year over year increase, as "mining" output grew 5.7% while utility output shrunk 3.7% from last year...

in addition to the indexes for those major industry groups, this report also indexes industrial production by market group; the index for production of consumer goods, which accounts for 27.14% of the total industrial production index, fell 0.5% in July to 94.1, which was the same index reading as February's; production of non-durable goods fell 1.5% as automotive products production fell 2.4% in July and output of home electronics was off 1.0%, while the index for consumer nondurables slipped 0.2% as a 0.3% increase in output of consumer energy products was offset by a 0.6% decline in clothing production and a 0.9% fall in paper products output...output of consumer goods is now 1.3% higher than it was last July, with most of that growth taking place last year; durable goods production was up 5.0% over the year, bolstered by double digit annualized growth rates in automotive products over the last three quarters, while production of consumer non-durables was up 0.3% as output of non-energy nondurables fell 0.1% since July of last year...

production of business equipment, which accounts for 9.61% of the industrial production index, was unchanged in July but is still 2.1% higher than a year ago; the production of information processing equipment fell 0.7%, while the index for transit equipment was unchanged and the index for industrial and other equipment was up 0.2%; in addition, production of defense and space equipment rose 1.0%, the first monthly increase since last year in that index as a preliminary 0.1% gain in June was revised to show a 0.1% decrease...meanwhile, the output of construction supplies increased 0.5% and is now 4.4% above a year ago, while July production of business supplies declined 0.7%, turning the year over year figures negative at -0.5%...production of materials to be processed further, which accounts for 46.54% of industrial output, saw a 0.4% increase in July and was 1.7% higher than a year ago; these were bolstered by a 1.2% increase in the output of energy materials due to gains in oil and natural gas extraction...inputs into durable goods were unchanged, as a 0.7% decline in output of equipment parts offset a 0.3% increase in consumer durable parts and a 1.0% increase in other durable goods inputs, while production of nondurable materials was down 0.5% due to 1.3% lower textiles output, 0.8% less paper production, and a 0.7% decrease in chemical materials output....

capacity utilization for total industry was down 0.1 percentage point to 77.6% in July; this is the percentage of our plant and equipment that was in use during the month, and it was being used at a 0.3% lower rate than a year ago; manufacturing utilization declined 0.1% to 75.8%, while the operating rate for mining equipment, including drilling rigs, rose 1.5 percentage points to 89.5%; meanwhile capacity utilization by utilities declined 1.6% to 76.2%, a rate 10.0% below its long-run average...utilization at the crude stage of processing increased 0.9% to 87.4%, while primary and semifinished stage utilization declined 0.2% to 75.5% and finished stage utilization fell 0.5% to 75.6%...our FRED graph for this release, the the right above, shows capacity utilization for total industry in pink since January 2005, expressed on the scale as a percentage of capacity in use; on the same graph we have the industrial production indexes over the same period, using the same scale on the left based on index values in 2007=100...the production index for all industry is in black, while the manufacturing production index is in blue, the utility production index is in green, and the mining production index, driven by gas and oil production, is in red...

according to the NY Fed, outstanding consumer credit fell $78 billion from $11.23 trillion to $11.15 trillion at the end of the 2nd quarter, a decline of 0.7% from the 1st quarter...mortgage balances fell by $91 billion, or 1.1%, to $7.84 trillion, and home equity lines of credit decreased by $12 billion, or 2.2%, to $540 billion, while the non-housing components of household debt increased 0.9%; total credit card debt was up $8 billion to $668 billion, outstanding student loan debt increased $8 billion to $994 billion, and auto loan balances increased $20 billion to $814 billion, the largest quarterly increase in auto loans since 2006...these components are shown graphically in the bar graph below from page 5 of the report, which shows the components of total debt for each quarter since the beginning of 2003…the bar at the far right represents the 2nd quarter and shows mortgage debt in orange has continued to shrink and now represents 71% of household debt…meanwhile home equity loans in purple accounted for 5% of 2nd quarter debt, auto loans in green accounted for 7%, credit card debt in blue accounted for 6%, and student loans in red have now risen to 9% of the total debt outstanding..(uncategorized debt in grey is 3% of the total)...we should note that this report does not distinguish between mortgage debt that has been paid off and mortgage debt that has been extinguished through a foreclosure or a short sale...

the next graph below, from page 10 of the report, shows the percentage of all that debt for each of those years that was either current or delinquent during the given quarter; in each bar the percentage of loans by dollar value that is current is represented by the dark green, while the percentage of debt that is more than 30 but less than 60 days delinquent is shown in green, while the percentage over 60 days overdue is shown in blue, over 90 days unpaid debt in yellow, and the percentage of debt over 120 days in arrears is shown in orange...the red in each column represents the percentage of debt in that quarter which was severely derogatory, which includes foreclosures, debt referred to a third party for collection, or debt charged off as bad debt...roughly $845 billion of 2nd quarter debt was delinquent, with $635 billion of that seriously delinquent, or more than 90 days behind in payments...as of the end of June, 7.6% of all debt was in some stage of delinquency, compared to the 8.1% delinquency rate at the end of the first quarter...the 90+ day delinquent balances of student loan debt that made this report newsworthy the past two quarters moderated, as seriously delinquent student debt fell from 11.2% of that outstanding in Q1 to 10.9% in the 2nd quarter...if we compare this graph to the mortgage delinquency and foreclosure graph from the MBA we saw last week, it's fairly clear that the delinquency status shown here over time aligns fairly closely with that of the mortgage debt for the corresponding quarters..

next, the adjacent chart, from page 17 of the pdf report, shows the percentage of consumer loans that have been referred to a 3rd party for collection in blue, and the average size of such loans for each quarter since the first quarter of 2003 in red; this is surprising on two counts; first, that well over 14% of loans are now in the hands of a collection agency or lawyer, and second, that the average loan balance that is referred for collection is comparatively low, now near $1400..much of this is said to be medical debt; we would have thought the average amounts collectors were making the effort to go after would be higher…

the 2nd half of the report (after page 18) is a series of charts for selected states; 12 states are included on each graph, and those chosen appear to be the 10 largest states plus Arizona and Nevada, the two states at the center of the housing bust and subsequent mortgage debt crisis...pages 21 and 22 have the equivalent of the two charts above broken down by state; the first graph we'll include here below is from page 20 of the pdf report and it shows the total debt outstanding per capita for each of those 12 selected states...we can note that both California in red and Nevada in dark blue peaked near $90,000 per capita debt, and now both states, which have seen significant foreclosures and distressed home sales, are well off their peaks; however, not much has changed in New Jersey, another high debt but judicial state in green, where foreclosures are moving so slowly it would take over 40 years at the current pace to process them all...also note that outstanding debt per capita in Ohio, Michigan, Pennsylvania, and Texas never got much over $40,000 per capita, and outstanding per capita debt hasn't fallen much for any of them during this so-called deleveraging period either...

lastly, we'll include this graph of the percentage of new bankruptcies by state, which comes from page 28 of the pdf report, and note that bankruptcies appear to have increased in every state graphed (and nationally, too, as per the national graph on page 16); the NY Fed makes no comment on this uptick, but only notes that 380,000 consumers had a bankruptcy notation added to their credit reports in 2013 Q2, a 4.8% drop from the same quarter a year earlier...there may be a seasonal pattern in bankruptcies at work here, but the chart is a bit too noisy to accurately discern that...

(the above is my weekly commentary that accompanied my sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

Monday, August 12, 2013

America has entered one of its
periods of historical madness, but this is the worst I can remember:
worse than McCarthyism, worse than the Bay of Pigs and in the long term
potentially more disastrous than the Vietnam War.
– John le Carré

America is descending into madness. The stories it now tells are
filled with cruelty, deceit, lies, and legitimate all manner of
corruption and mayhem. The mainstream media spins stories that are
largely racist, violent, and irresponsible —stories that celebrate power
and demonize victims, all the while camouflaging its pedagogical
influence under the cheap veneer of entertainment. Unethical grammars of
violence now offer the only currency with any enduring value for
mediating relationships, addressing problems, and offering instant
pleasure. A predatory culture celebrates a narcissistic
hyper-individualism that radiates a near sociopathic lack of interest in
or compassion and responsibility for others. Anti-public intellectuals
dominate the screen and aural cultures urging us to shop more, indulge
more, and make a virtue out of the pursuit of personal gain, all the
while promoting a depoliticizing culture of consumerism. Undermining
life-affirming social solidarities and any viable notion of the public
good, right-wing politicians trade in forms of idiocy and superstition
that mesmerize the illiterate and render the thoughtful cynical and
disengaged. Military forces armed with the latest weapons from
Afghanistan play out their hyper-militarized fantasies on the home front
by forming robo SWAT teams who willfully beat youthful protesters and
raid neighborhood poker games. Congressional lobbyists for the big
corporations and defense contractors create conditions in which war
zones abroad can be recreated at home in order to provide endless
consumer products, such as high tech weapons and surveillance tools for
gated communities and for prisons alike.
The issue of who gets to define the future, own the nation’s wealth,
shape the reach of state resources, control of the global flows of goods
and humans, and invest in institutions that educate an engaged and
socially responsible citizens has become largely invisible. And yet
these are precisely these issues that offer up new categories for
defining how matters of representations, education, economic justice,
and politics are to be defined and fought over. The stories told by
corporate liars and crooks do serious harm to the body politic, and the
damage they cause together with the idiocy they reinforce are becoming
more apparent as America descends into authoritarianism, accompanied by
the pervasive fear and paranoia that sustains it.
The American public needs more than a show of outrage or endless
demonstrations. It needs to develop a formative culture for producing a
language of critique, possibility, and broad-based political change.
Such a project is indispensable for developing an organized politics
that speaks to a future that can provide sustainable jobs, decent health
care, quality education, and communities of solidarity and support for
young people. At stake here is a politics and vision that informs
ongoing educational and political struggles to awaken the inhabitants of
neoliberal societies to their current reality and what it means to be
educated not only to think outside of a savage market-driven commonsense
but also to struggle for those values, hopes, modes of solidarity,
power relations, and institutions that infuse democracy with a spirit of
egalitarianism and economic and social justice. For this reason, any
collective struggle that matters has to embrace education as the center
of politics and the source of an embryonic vision of the good life
outside of the imperatives of predatory capitalism. As I have argued
elsewhere, too many progressives are stuck in the apocalyptic discourse
of foreclosure and disaster and need to develop what Stuart Hall calls a
“sense of politics being educative, of politics changing the way people
see things.” This is a difficult task, but what we are seeing in cities
that stretch from Chicago to Athens, and other dead zones of capitalism
throughout the world is the beginning of a long struggle for the
institutions, values, and infrastructures that make critical education
and community the core of a robust, radical democracy. This is a
challenge for young people and all those invested in the promise of a
democracy that extends not only the meaning of politics, but also a
commitment to economic justice and democratic social change.
The stories we tell about ourselves as Americans no longer speak to
the ideals of justice, equality, liberty, and democracy. There are no
towering figures such as Martin Luther King, Jr. whose stories
interweave moral outrage with courage and vision and inspired us to
imagine a society that was never just enough. Stories that once
inflamed our imagination now degrade it, overwhelming a populace with
nonstop advertisements that reduce our sense of agency to the
imperatives of shopping. But these are not the only narratives that
diminish our capacity to imagine a better world. We are also inundated
with stories of cruelty
and fear that undermine communal bonds and tarnish any viable visions
of the future. Different stories, ones that provided a sense of history,
social responsibility, and respect for the public good, were once
circulated by our parents, churches, synagogues, schools, and community
leaders. Today, the stories that define who we are as individuals and as
a nation are told by right-wing and liberal media that broadcast the
conquests of celebrities, billionaires, and ethically frozen politicians
who preach the mutually related virtues of the free market and a
permanent war economy.
These neoliberal stories are all the more powerful because they seem
to undermine the public’s desire for rigorous accountability, critical
interrogation, and openness as they generate employment and revenue for
by right-wing think tanks and policy makers who rush to fill the
content needs of corporate media and educational institutions.
Concealing the conditions of their own making, these stories enshrine
both greed and indifference encouraging massive disparities in wealth
and income. In addition, they also sanctify the workings of the market,
forging a new f political theology that inscribes a sense of our
collective destiny to be governed ultimately and exclusively by market
forces. Such ideas surely signal a tribute to Ayn Rand’s dystopian
society, if not also a rebirth of Margaret Thatcher’s nonfiction version
that preached the neoliberal gospel of wealth: there is nothing beyond
individual gain and the values of the corporate order.
The stories that dominate the American landscape embody what stands
for commonsense among market and religious fundamentalists in both
mainstream political parties: shock-and-awe austerity measures; tax
cuts that serve the rich and powerful and destroy government programs
that help the poor, elderly, and sick; attacks on women’s reproductive
rights; attempts to suppress voter ID laws and rig electoral college
votes; full-fledged assaults on the environment; the militarization of
everyday life; the destruction of public education, if not critical
thought itself; an ongoing attack on unions, on social provisions, and
on the expansion of Medicaid and meaningful health care reform. These
stories are endless, repeated by the neoliberal and neoconservative
walking dead who roam the planet sucking the blood and life out of
everyone they touch—from the millions killed in foreign wars to the
millions incarcerated in our nation’s prisons.
All of these stories embody what Ernst Bloch has called “the swindle
of fulfillment.” That is, instead of fostering a democracy rooted in the
public interest, they encourage a political and economic system
controlled by the rich, but carefully packaged in consumerist and
militarist fantasy. Instead of promoting a society that embraces a
robust and inclusive social contract, they legitimate a social order
that shreds social protections, privileges the wealthy and powerful and
inflicts a maddening and devastating set of injuries upon workers,
women, poor minorities, immigrants, and low- and middle-class young
people. Instead of striving for economic and political stability, they
inflict on Americans marginalized by class and race uncertainty and
precarity, a world turned upside-down in which ignorance becomes a
virtue and power and wealth are utilized for ruthlessness and privilege
rather than a resource for the public good.
Every once in a while we catch a brutal glimpse of what America has
become in the narratives spun by politicians whose arrogance and quests
for authority exceed their interest to conceal the narrow-mindedness,
power-hungry blunders, cruelty, and hardship embedded in the policies
they advocate. The echoes of a culture of cruelty can be heard in
politicians such as Senator Tom Coburn, a Republican from Oklahoma, who
believes that even assistance to those unemployed, homeless, and working
poor suffering the most in his home state should be cut in the name of
austerity measures. We hear it in the words of Mike Reynolds, another
politician from Oklahoma who insists that government has no
responsibility to provide students with access to a college education
through a state program “that provides post-secondary education
scholarship to qualified low-income students.” We find evidence of a
culture of cruelty in numerous policies that make clear that those who
occupy the bottom rungs of American society—whether low-income families,
poor minorities of color and class, or young, unemployed, and failed
consumers—are considered disposable, utterly excluded in terms of
ethical considerations and the grammar of human suffering.
In the name of austerity, budget cuts are enacted that fall primarily
on those individuals and groups who are already disenfranchised, and
will thus seriously worsen the lives of those people now suffering the
most. For instance, Texas has enacted legislation that refuses to
expand its Medicaid program, which provides healthcare for low-income
people. As a result, healthcare coverage will be denied to over 1.5
low-income residents as a result of Governor Perry’s refusal to be part
of the Obama administration’s Medicaid expansion. This is not merely
partisan politics; it is an expression of a new form of cruelty and
barbarism now aimed at those considered disposable in a neo-Darwinian
survival-of-the-fittest society. Not surprisingly, the right-wing
appeal to job-killing and provision-slashing austerity now functions as
an updated form of medieval torture, gutting myriad of programs that add
up to massive human suffering for the many and benefits for only a
predatory class of neo-feudal bankers, hedge fund managers, and
financiers that feed off the lives of the disadvantaged.
The general response from progressives and liberals does not take
seriously the ways in which the extreme right-wing articulates its
increasingly pervasive and destructive view of American society. For
instance, the views of new extremists in Congress are often treated,
especially by liberals, as a cruel hoax that is out of touch with
reality or a foolhardy attempt to roll back the Obama agenda. On the
left, such views are often criticized as a domestic version of the
tactics employed by the Taliban—keeping people stupid, oppressing women,
living in a circle of certainty, and turning all channels of education
into a mass propaganda machine of fundamentalist Americanism. All of
these positions touch on elements of a deeply authoritarian agenda. But
such commentaries do not go far enough. Tea Party politics is about more
than bad policy, policies that favor the rich over the poor, or for
that matter about modes of governance and ideology that represent a
blend of civic and moral turpitude. The hidden order of neoliberal
politics in this instance represents the poison of neoliberalism and its
ongoing attempt to destroy those very institutions whose purpose is to
enrich public memory, prevent needless human suffering, protect the
environment, distribute social provisions, and safeguard the public
good. Within this rationality, markets are not merely freed from
progressive government regulation, they are removed from any
considerations of social costs. And where government regulation does
exits, it functions primarily to bail out the rich and shore up
collapsing financial institutions and for what Noam Chomsky has termed
America’s only political party, “the business party.” The stories that
attempt to cover over America’s embrace of historical and social amnesia
at the same time justify authoritarianism with a soft-edge and weakens
democracy through a thousand cuts to the body politic. How else to
explain the Obama administration’s willingness to assassinate American
citizens allegedly allied with terrorists, secretly monitor the email
messages and text messages of its citizens, use the NDAA to arrest and
detain indefinitely American citizens without charge or trial, subject
alleged spies to an unjust military tribunal system, use drones as part
of a global assassination campaign to arbitrarily kill innocent people,
and then dismiss such acts as collateral damage. As Jonathan Turley
points out, “An authoritarian nation is defined not just by the use of
authoritarian powers, but by the ability to use them. If a president can
take away your freedom or your life on his own authority, all rights
become little more than a discretionary grant subject to executive
will.”
At the heart of neoliberal narratives are ideologies, modes of
governance, and policies that embrace a pathological individualism, a
distorted notion of freedom, and a willingness both to employ state
violence to suppress dissent and abandon those suffering from a
collection of social problems ranging from dire poverty and joblessness
to homelessness. In the end, these are stories about disposability in
which growing numbers of groups are considered dispensable and a drain
on the body politic, the economy, and the sensibilities of the rich and
powerful. Rather than work for a more dignified life, most Americans now
work simply to survive in a survival-of-the-fittest society in which
getting ahead and accumulating capital, especially for the ruling elite,
is the only game in town. In the past, public values have been
challenged and certain groups have been targeted as superfluous or
redundant. But what is new about the politics of disposability that has
become a central feature of contemporary American politics is the way in
which such anti-democratic practices have become normalized in the
existing neoliberal order. A politics of inequality and ruthless power
disparities is now matched by a culture of cruelty soaked in blood,
humiliation, and misery. Private injuries not only are separated from
public considerations such narratives, but narratives of poverty and
exclusion have become objects of scorn. Similarly, all noncommercial
public spheres where such stories might get heard are viewed with
contempt, a perfect supplement to the chilling indifference to the
plight of the disadvantaged and disenfranchised.
Any viable struggle against the authoritarian forces that dominate
the United States must make visible the indignity and injustice of these
narratives and the historical, political, economic, and cultural
conditions that produce them. This suggests a critical analysis of how
various educational forces in American society are distracting and
miseducating the public. Dominant political and cultural responses to
current events—such as the ongoing economic crisis, income inequality,
health care reform, Hurricane Sandy, the war on terror, the Boston
Marathon bombing, and the crisis of public schools in Chicago,
Philadelphia, and other cities—represent flashpoints that reveal a
growing disregard for people’s democratic rights, public accountability,
and civic values. As politics is disconnected from its ethical and
material moorings, it becomes easier to punish and imprison young people
than to educate them. From the inflated rhetoric of the political right
to market-driven media peddling spectacles of violence, the influence
of these criminogenc and death-saturated forces in everyday life is
undermining our collective security by justifying cutbacks to social
supports and restricting opportunities for democratic resistance.
Saturating mainstream discourses with anti-public narratives, the
neoliberal machinery of social death effectively weakens public supports
and prevents the emergence of much-needed new ways of thinking and
speaking about politics in the twenty-first century. But even more than
neutralizing collective opposition to the growing control and wealth of
predatory financial elites—which now wield power across all spheres of
U.S. society—responses to social issues are increasingly dominated by a
malignant characterization of marginalized groups as disposable
populations. All the while zones of abandonment accelerate the
technologies and mechanisms of disposability. One consequence is the
spread of a culture of cruelty in which human suffering is not only
tolerated, but viewed as part of the natural order of things.
Before this dangerously authoritarian mindset has a chance to take
hold of our collective imagination and animate our social institutions,
it is crucial that all Americans think critically and ethically about
the coercive forces shaping U.S. culture—and focus our energy on what
can be done to change them. It will not be enough only to expose the
falseness of the stories we are told. We also need to create alternative
narratives about what the promise of democracy might be for our
children and ourselves. This demands a break from established political
parties, the creation of alternative public spheres in which to produce
democratic narratives and visions, and a notion of politics that is
educative, one that takes seriously how people interpret and mediate the
world, how they see themselves in relation to others, and what it might
mean to imagine otherwise in order to act otherwise. Why are millions
not protesting in the streets over these barbaric policies that deprive
them of life, liberty, justice, equality, and dignity? What are the
pedagogical technologies and practices at work that create the
conditions for people to act against their own sense of dignity, agency,
and collective possibilities? Progressives and others need to make
education central to any viable sense of politics so as to make matters
of remembrance and consciousness central elements of what it means to be
critical and engaged citizens.
There is also a need for social movements that invoke stories as a
form of public memory, stories that have the potential to move people to
invest in their own sense of individual and collective agency, stories
that make knowledge meaningful in order to make it critical and
transformative. If democracy is to once again inspire a populist
politics, it is crucial to develop a number of social movements in which
the stories told are never completed, but are always open to self- and
social reflection, capable of pushing ever further the boundaries of our
collective imagination and struggles against injustice wherever they
might be. Only then will the stories that now cripple our imaginations,
politics, and democracy be challenged and hopefully overcome.

Henry A. Giroux currently holds the Global TV
Network Chair Professorship at McMaster University in the English and
Cultural Studies Department and a Distinguished Visiting Professorship
at Ryerson University. His most recent book is The Educational Deficit and the War on Youth (Monthly Review Press, 2013), His web site is www.henryagiroux.com

Sunday, August 11, 2013

this week saw the release of both of the major national reports that track the condition of US home mortgages, coincidentally as of the last day of June, giving us an opportunity to compare them side by side, which should give us a better picture of the overall situation....we should note they're not directly comparable, however, because the Mortgage Bankers Association’s (MBA) 2nd quarter National Delinquency Survey is issued quarterly and is seasonally adjusted, whereas the June Mortgage Monitor (pdf) from Lender Processing Services (LPS) is a report issued monthly that is not seasonally adjusted...on previous occasions where their release has coincided, we've noted that the MBA has tended to show slightly higher delinquency rates than LPS; that's also true this time, though it's interesting to note that this end quarter they're converging, as the MBA report has mortgage delinquencies down slightly, whereas LPS shows a substantial jump in late house payments in June, turning their 3 month delinquency figures negative...the MBA also notes that the improvement they show in seriously delinquent mortgage percentages may be slightly less than they indicate because "at least one large specialty servicer that has received a number of loan transfers did not participate in the MBA survey"

according to the MBA, the national delinquency rate, or the percentage of homeowners who were late at least one house payment late but not in foreclosure, declined to a seasonally adjusted 6.96% of all loans outstanding at the end of the second quarter of 2013, down from 7.25% at the end of the first quarter, and down from a delinquency rate of 7.58% a year ago, and the lowest level since mid-2008...the percentage of mortgages that were in the foreclosure process, or those who've had foreclosure proceedings initiated against them but have not yet had their home seized, also fell over the quarter to 3.33% of all mortgages, from 3.55% at the end of the first quarter, and down from the foreclosure inventory rate of 4.27% one year ago; new foreclosures were started on just 0.64% of mortgages in the 2nd quarter, down from 0.70% in the first quarter and from 1.42% of all properties at the September 2009 foreclosure peak...the seasonally adjusted "serious delinquency rate", which includes those who more than 90 days delinquent in addition to those in the foreclosure process, was at 5.88% at the end of the quarter, down from 6.39% at the the end of the first quarter and a decrease from the 7.31% serious delinquency rate of a year ago...combined with those who have missed at least one mortgage payment, the total of all delinquent or in foreclosure mortgages at the end of march amounted to 10.29% of all mortgages on an seasonally adjusted bases, and 10.13% on an unadjusted basis, so despite the continual improvement in the overall delinquency rate, there were still more than one in ten homeowners who were behind on housepayments at the end of June...

Of 49,823,992 active mortgages in June, LPS reported that 4,785,000 home loans, or 9.61% of all first lien mortgages, were at least one payment delinquent or in foreclosure at the end of June; of those, 1,983,000 homes loans were at least 30 days but less than 90 days late; another 1,344,818 mortgages were 90 or more days delinquent, but not yet in foreclosure, and 1,458,000 properties, were in the foreclosure process, ie, they had received at least one notice but their home had not yet been seized....that foreclosure inventory was down from 1,335,000 in May, and at 2.93% of all mortgages, represents the first time homes in foreclosure fell below 3% of tracked properties since early 2009...there were 109, 042 foreclosure starts in June, the lowest monthly number of new foreclosures in a month since the crisis began..

as most of the mortgage monitor is a graphic presentation, we'll have to looks at some of those to see the rest of the story...our first graph is from page 4 of the mortgage monitor pdf and tracks with a green line the percentage of active home loans that have been in the foreclosure process, also known as the foreclosure inventory, from 1995 to the present...these are the home loans in between the time the servicer's attorney first initiates the foreclosure and the "foreclosure sale", which typically transfers title to the bank (terminology is on page 25 and 26 of the pdf)... at 2.93% of home mortgages outstanding, we can see that's down considerably from the October 2011 peak of 4.29%, but still nearly six times the 0.44% foreclosure inventory of pre-crisis December 2005...then in red, this graph tracks the percentage of loans that have been delinquent monthly over the same period, where we can see this June’s spike to 6.68% delinquent, following the largest year to date decline in delinquencies since 2002...you can also note the seasonality of delinquencies, where they usually peak at year end, when most people get overextended during the holidays, and then decline over the first few months of each year as homeowners catch up...even at 6.68%, June's delinquency rate is still below the 7.17% rate of December 2012, when many homeowners put holiday shopping ahead of their housepayments, and still well below the peak percentage of 10.57% registered in January 2010, although it remains roughly 50% over the pre-crisis level, marked on the chart at 4.27% in December 2005...

the map below, from page 5, shows the percentage of new delinquencies by state; ie, those who were current on their mortgage in May but fell behind in June; unfortunately, the percentages even on the original map are difficult to read, but what the map shows is that all 50 states chalked up a new delinquency rate well over 10%, ranging from a low of 13.9% new mortgage delinquencies in Nevada to as high as 31.7% new delinquencies in Colorado and a 29.6% jump of those newly behind on their housepayments in Utah...the darker the pink, the greater the percentage of new 30 day delinquencies; note that every state except Connecticut in the Northeast saw an increase of more than 20% in new mortgage delinquencies, as did Wisconsin, Illinois, Minnesota, North & South Dakota, Nebraska, Oklahoma, Idaho, New Jersey and South Carolina...

next, the adjacent chart, from page 6 of the mortgage monitor, serves to show that the increase in delinquencies in June was not interest rate driven, because the increase in delinquencies for those with 30 year fixed rate mortgages, shown in blue, at 19% month over month, was greater than the 18% month over month increase for those with adjustable rate mortgages, shown in red...but you will note on this chart that ARMs have been consistently more delinquent than the 30 year mortgages, and new delinquencies in ARMs at 3.65% in June outpaced new delinquencies in 30 day mortgages at 2.87%….

the next graph, from page 8, shows that the deterioration in homeowner's mortgage payment situations in June also affected the number of delinquent mortgages that "cured", or those who were delinquent who got caught up during each month...in red, we have graphed the number homeowners who were one to two months behind on payments who caught up on their payments each month; which collapsed to a five year low in June...although LPS doesn't provide the data, it also appears the same is true for those who were 3 to 5 months behind, as the violet line on that graph representing that cure bracket also seems to be at a 5 year low....meanwhile, the number of those who were more than 6 months delinquent who got caught up in June, as indicated by the teal blue graph, also appears to be at it's lowest level since early 2012...note the number of cures for these last two is on the left scale, while it's on the right for the short term delinquencies...

we also want to take a look at some LPS graphics regarding the foreclosure inventory in judicial and non-judicial states, to compare to similar data we saw from the MBA….this next graph, to the right, from page 16 of the mortgage monitor, shows the foreclosure inventory as a percentage of all mortgages since the beginning of 2008...you'll recall these are those homes that are stuck in the foreclosure process but have not yet been seized...the blue track on the graph shows the percentage of homes in judicial states that are in the foreclosure pipeline, now down to 4.91%, after having peaked at 6.60% in January of 2012...the red line tracks the percentage of home mortgages in non-judicial states that were in the foreclosure process; this is now down to 1.50%, after having peaked at 2.97% in December of 2010...the black line is simply the national average, now at 2.93%..

meanwhile, the graph below, from page 15 of the mortgage monitor, shows the percentage of this foreclosure inventory that has proceeded to the next step each month, which is euphemistically referred to a a foreclosure sale, where the home is usually auctioned back to the bank in lieu of the unpaid mortgage debt and becomes part of their REO inventory (Real Estate Owned -- terminology is on page 25 of the pdf)...as the red track representing non-judicial states shows, without court intervention this has historically proceeded quite rapidly, from home seizure rates above 12% of all foreclosure inventory early on in the crisis to the recent rate of 6.31% in June, which was up 15.16% from May's rate...the blue line shows the percentage of homes in judicial states that are in foreclosure which have been seized each month; you can see it dropped well below 2% when foreclosure fraud was in the news a few years back, but it's now crept back up to over 3% at 3.02% of all foreclosed homes as of June, 6.74% more than May's rate...

the next graph, from page 17 of the pdf, shows that the pipeline ratios, or the average number of months it typically takes for a foreclosure to be completed, have been converging for judicial and non-judicial states….in this computation, which you see on the chart, LPS takes the total number of seriously delinquent and the in foreclosure process mortgages and divides it by the average number of completed foreclosures per month in each state over the previous six months to come up with the number of months of foreclosure backlog there is for that state (assuming all seriously delinquent mortgages proceed to that final stage)…with the slow pace of completed foreclosures nationwide, that pipeline has stretched out to well over 3 years nationwide; 54 months for judicial states and 39 months for non-judicial states…note that the mean foreclosure pipeline time was as high as 118 months – nearly 10 years - for judicial states during the foreclosure moratoriums imposed by the banks during the wake of the robosigning scandal…the national average number of days that a foreclosed property has remained in the foreclosure inventory is now up to 860 days as of this report, while the average seriously delinquent mortgage has remained seriously delinquent for 512 days without proceeding to foreclosure…

finally, the next two graphics will break this all down by state....first, from page 22 of the pdf, we have the table of non-current mortgage and foreclosure percentages in all 50 states and the District of Columbia which we’ve featured in previous months...the first column shows the delinquency rate for each state, ie, the percentage of mortgages in each state that are at least one month behind and not yet in foreclosure, a category that’s jumped for each state this month...the second column is the percentage in each state that are in foreclosure, which has been falling consistently, by at least a point or more every month over the past year, and the third column is the total non-current percentage, or sum of all those behind of their mortgage, which rose from 9.13% nationally in May to 9.61 in June...note that the last column, which shows the year over year percentage change in non current mortgages in each state, is still falling for every state despite June's jump, although some states, like New York, Vermont and Wyoming, have barely seen any change in a year...

also note that judicial states, where banks must establish their right to foreclose in court, are marked on the table below by a red asterisk...these states have the highest percentages of mortgages still stranded in foreclosure, led by Florida, where LPS shows 9.5% of all mortgaged homes still in foreclosure, contrasted to the 10.6% in foreclosure the MBA showed ..other judicial states with a foreclosure inventory greater than 5% include New Jersey at 7.1%, New York at 5.8%, Hawaii at 5.7%, and Maine at 5.3%...non-judicial Mississippi has remained an outlier here years, with a low foreclosure rate despite the fact that 15.4% of their homeowners still remain non-current on their mortgages...

lastly, the map graphic below, from page 18 of the pdf, shows the percentage improvement in "performance" of non-current mortgages that each state has made from worst of the mortgage crisis for each state....note that the scale runs from just 4.9% off the peak for the deep red state of New York, to a 65.7% "improvement" in dark green Arizona, where most seriously delinquent homeowners were quickly foreclosed on...you'll note that the non-current inventory remains near the delinquency peak in most of the Northeast, with only 5% more mortgages in Maine current now than at the worst of the crisis, and just an 8.7% improvement from the worst in New Jersey...

seasonally adjusted exports of $191.2 billion, $4.1 billion or 2.2% above those of May, and imports at $225.4 billion, $5.8 billion, or 2.5% less than May’s, resulted in a goods and services deficit of $34.2 billion, down 22.4% from the May deficit of $44.1 billion, which was originally reported at $45.0 billion...our adjusted deficit in goods decreased by $9.7 billion to $53.2 billion as exports of goods increased $4.0 billion to $134.3 billion and our imports of goods decreased $5.7 billion to $187.4 billion, while our trade surplus in services increased by $0.1 billion to $18.9 billion as our exports of services increased $0.1 billion to $56.9 billion and imports of services were statistically unchanged at $38.0 billion...on the same balance of trade basis, our unadjusted trade deficit in goods was at $50.6 billion, so the effect of the seasonal adjustment was to raise the aggregate goods deficit by $2.6 billion....

our FRED bar graph below shows the monthly change in millions of dollars in our total exports, imports, and trade balance for every month going back to January 2008 (click for larger version)..in each set of three bars, blue is the change in exports for the month, red is the change in imports, and brown is the change in the trade balance, with increases above the 0 line and decreases below it…that exports add to the change in the trade balance and imports subtract from it should be evident, as each brown bar is composed from the net change of the blue minus the net change of the red…

commerce department reporting on exports and imports of goods are lumped into the very general end use categories of foods, feeds, and beverages, industrial supplies and materials, capital goods, automotive vehicles, parts, and engines, consumer goods, and "other" goods, which are then rounded to the nearest tenths of billions to reflect the imprecision of these monthly estimates; however, we can extract raw data for the larger components of those categories in millions from the full release with tables to give us a more precise clue as to what has been moving our trade balance (reference exhibit 7 for seasonally adjusted exports; exhibit 8 for imports)

the June increase in exports of goods included a $1.5 billion increase in exports of industrial supplies and materials to $43.3 billion, which included increases of $898 million in exports of fuel oil to $5,982 million, $575 million of other petroleum products to $4,694 million, $378 million more exports of organic chemicals to $3,070 million and $322 million more in monetary gold at $2,938 million; exports of capital goods also increased by $1.5 billion, to 46.2 billion, which included a increase of $428 million in civilian aircraft engines to $2,659 million, and an increase of $322 million in telecommunications equipment to $3,483 million, and an increase of $305 million in industrial engines to $2,626 million...exports of consumer goods also increased by $1.0 billion to $16.6 billion, including an increase of $673 million in jewelry to $1,494 million and an increase of $376 million in gem diamonds to $2,009 million, while exports of pharmaceuticals shrunk $317 million to $3,992 million...exports of foods feeds and beverages increased by $0.3 billion to $10.1 billion, led by a $160 million increase in wheat exports to $934 million and a $144 million increase in exports of meat and poultry to $1,640 million...meanwhile, exports of other goods increased $330 million to $5,368 million and exports of automotive vehicles, parts, and engines decreased by a seasonally adjusted $439 million to $12,621 million..

the decrease in imports from May to June included our imports of industrial supplies and materials declining $2.5 billion to $54.6 billion, including $1,028 million less imports of fuel oil, $1,025 million less imports of other petroleum products, and $339 million less imports of non monetary gold, which were down to $3,070 million, $3597 million, and $1026 million respectively...imports of crude oil, still our largest single item, were up $33 million to $21.993 billion, as oil averaged $96.93 a barrel in June, up a bit from $96.84 in May...we also imported a seasonally adjusted $43.7 billion of consumer goods in June, $1.6 billion less than in May, as our imports of cellphones and similar goods fell $1,485 million to $7,705 million, our imports of gem diamonds fell $546 million to $1,734 million while our imports of TVs and video equipment rose $214 million to $2,514 million...our June imports of foods, feeds, and beverages fell $0.4 billion to $9.5 billion as we imported $106 million less fruits and juices and $95 million less in cocoa beans with widespread declines in imports of other foodstuffs...in addition, imports of automotive vehicles, parts, and engines were up $0.3 billion to $25.7 billion and imports of other goods were up $1.2 billion, while imports of capital goods were statistically unchanged at $45.6 billion as increases of $300 million in imports of civilian aircraft engines and $116 million of materials handling equipment offset decreases of $176 million in imports of semiconductors, $140 million in computers and $111 million in computer accessories..

our bilateral deficits in goods trade, which are not seasonally adjusted, generally improved across the board; our goods deficit with China, which improved from $27.9 billion in May to $26.6 billion in June, still accounted for more than half of our $50.6 billion unadjusted goods deficit...other major bilateral trade deficits on an unadjusted basis in June include a $7.1 billion deficit with the European Union, down from $10.8 billion in May, a $5.8 billion deficit with OPEC, $5.5 billion with Japan, $4.9 billion with Germany, $4.8 billion with Mexico, $3.0 billion with Saudi Arabia, $1.6 billion with South Korea, $1.6 billion with Canada, $1.4 billion with Ireland, $1.2 billion with Venezuela and $1.0 billion with India...small bilateral trade surpluses were recorded with Hong Kong at $3.4 billion, Australia at $1.7 billion, Brazil at $1.6 billion and Singapore at $1.2 billion....

(the above is my weekly commentary that accompanied my sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

note on the graphs used here

in March a year ago the St Louis Fed, home to the FRED graphs, changed their graphs to an interactive format, which apparently necessitated eliminating some of the incompatible options which we had used in creating our static graphs before then...as a result, many of the FRED graphs we've included on this website previous to that date, all of which were all created and stored at the FRED site and which we'd always hyperlinked back there, were reformatted, which in many cases changed our bar graphs to line graphs, and some cases rendered them unreadable... however, you can still click the text links we've always used in referring to them to view versions of our graphs as interactive graphs on the FRED site, or in the case where an older graph has gone missing, click on the blank space where it had been in order to view it in the new format....